Generating Revenue with Ads That Work in AR, with Admix CEO Samuel Huber

The old ways of advertising in legacy media just won’t work in an XR environment, so Admix CEO Samuel Huber has tried to figure out more effective ways to peddle products in a virtual realm. Today he explores his XR marketing ethos, which focuses on the user first.

Alan: Today’s guest is Samuel Huber, founder and CEO of Admix, the first ad tech platform for mixed reality, giving XR developers the best tools to monetize their content.  Admix is a platform that allows advertisers to place non-intrusive ads into VR and AR and gaming content. Their platform allows companies to filter hundreds of advertisers via their programmatic platform, and start generating revenue within minutes. Previous to Admixed, Sam was part of the e-commerce platform Kout.io, social gambling app Betify and the first binary trading game on the app store, Rogue Trader. Admix is a venture-backed startup, having raised $2.4-million. You can learn more about Samuel and Admix by visiting: https://admix.in/

Sam, welcome to the show.

Sam: Hey Alan, how are you? Good to be here.

Alan: I’m fantastic; thank you so much for being on the show.

Sam: Thanks for having me, man.

Alan: It’s my absolute pleasure. For the people who don’t know you, I know you’re very active on LinkedIn. For those who don’t know, do you want to just introduce yourself and introduce Admix in your own words? Describe what your company does and what your service and platform does to serve businesses.

Sam: Yeah, yeah, for sure. I started Admix about two years ago now, initially based in London. Now we have also an office in San Francisco. The whole idea that we realize is that there’s so many great, immersive content being created, whether it’s VR, AR, and this is really going to be the way that content is going to be consumed in the future. Right? Whether it’s for entertainment, games, education, training — all of this stuff is going to be spatial content. And what we figured out is, there’s already great content being created, but very little incentive for the creators — or ways for them — to actually monetize this content. On the web, if you create a website, you can go to Google and you get a tag, and you can put ads and you can make a living out of it. But that’s actually not what happens right now in VR and AR. I think over the next few years, we’re going to see a lot of paid apps migrating to free content. That’s generally the way things go. And at that point, these developers are going to look for a new business model and advertising is going to play a massive part of it. 

However, from the very beginning, our idea was to build a better future for advertising. Not banners and pop-ups and annoying, that are already terrible on the web, and would be even worse in VR and AR. But instead, creating an advertising model that really works for this immersive content. So, we’re talking about product placement. It’s how brands can be part of the experience, part of the creative process without intruding, but while still generating great return for the developers. So that’s really what we’ve built. It’s a simple SDK that integrates with Unity as a content creator, or you can drag and drop product placement within your experience. We then connect that to a massive network of advertisers. 

So basically, you create your app at Admix and you can get revenue generating in about three or four minutes. And it’s continuous. It’s instant revenue. And so far, the developers that we work with really, really like us. We have about 22 people now in the company, raised over 2 million dollars last year, and we are expanding this year internationally as well.

Alan: That’s incredible. So, here you are: you start a company two years ago, you figure out that ads are going to be a thing in immersive content. There’s tons of content being made and developers and content providers are just not getting paid for the work they’re doing. And so you created this platform, to help them monetize that. Give us an example of one of the best ways that this has been used to date.

Sam: There’s a lot of really interesting ways. A very simple way is game developers, game studios; a few people that somehow got an app that is very popular on the Google Daydream — or mobile VR, basically — and they were really struggling to make money with it, because it’s not an app that people would be willing to pay for. It’s very entertaining, but it’s not something that you would happily put your credit card to pay for.

So they tried, actually, to use “normal” — I would call them “desktop” or “mobile” — ads, like a banner at the bottom of your screen. But of course, it’s not adapted to VR. So when you wear the headset, you see this banner that is kind of blurry at the bottom. It kind of counts as an impression, but it’s terrible. It’s a terrible impression. And then you have a video interstitial that interrupts your experience. It’s obviously not VR. You have to take the headset off.

Anyway, so they were making some revenue like this, but the users were really pissed off. You could read the comments. It was like, “cool app, but too many ads,” blah, blah. And so we came in. We basically told them, “look, you guys are doing great, but we can actually get you ads that work for you! Get ads that work for VR and AR. The user plugin… one of their apps was kind of a roller coaster, a typical VR app. And with our plugin integrated with Unity, they were able to place ads alongside the track, by basically planting billboards that are part of the scenery. So you go along this rollercoaster, and sometimes you pass very fast next to a billboard. If you don’t want to look at it, you don’t look at it. It’s just like the real world. It doesn’t take over the experience. It doesn’t look out of place. 

It’s been going fantastically. They have a lot more users now. Users are a lot happier. And just to give you a bit of a figure… I mean, you’re talking about a couple of guys. They’re making around $40,000 a month just using our solution. And it’s been completely changing their business; they’ve been releasing more apps, reinvesting. And that’s really what we all about. It’s about, how do you give the creators a reward for their great work, so that they can reinvest and create more content? That’s what is fueling the whole ecosystem. Because more and more content, then they get rewarded even more, and they can invest more, and they can build better stuff. That’s really what we’re all about, and seeing that from a small team is just super exciting, to be able to empower people like that.

Alan: I think that’s really incredible. Forty thousand a month is a phenomenal amount of money for a small studio.

Sam: And people say, “oh, VR, I don’t make money in VR.” Well, there are ways to do it, and we want to be the ones that create a great way to do it. It’s really about creating a great experience for the developers, of course —  they make money — but at the end of the day, who we are prioritizing is the user. We want users to be comfortable with what they see, because if they hate it, they obviously won’t use it. So it’s all about the user. It’s all about creating a great experience. And so this is why the type of ads that we are creating, we think, are really putting the users first, because they are not intrusive, and they’re really in-line and relevant with the content.

Alan: It’s amazing. I think one of the things that immediately strikes me is that you’re aiming this towards the developers, but… let’s say I’m a marketer and I want to sell my products. Do you take my products and then put me in front of the right developers to match that content? Or is it more of a hands-off thing?

Sam: Our solution is programmatic, and just to explain very quickly what it means; programmatic basically is a way to automate buying and selling of ads. That powers 80 percent of the web nowadays. Before that, if you wanted to get ads from a certain brand, you kind of had to ring the brand and then to reach a deal. It was very manual. Now, you plug in platforms that I call demand-side platforms or supply-side platforms, and basically, you make your inventory available there, and then thousands of advertisers have access to it. That’s how it works at a very, very high level. Obviously, it’s super technical and there’s thousands of these platforms, which we try to connect to as much as possible. But that’s basically the idea.

What we are doing is really focusing on the developer side. We’re giving an SDK – this Unity plugin — to our developers. They can create this inventory. They can say, “I want to put a banner on this wall of my game. I want to place a video on the screen, and I want to place a 3D product here.” And you would trigger when this happens during my game. Then these spaces get sold to a network of advertisers. 

So, from the other side, the advertisers do not use our platform but are connected to our partners. They do have access to all this targeting stuff. Just like on the web, you can say, “I want to reach women between 30 and 40 who like these kinds of things.” You can do exactly the same because we connect to the same platform. The only difference is that we’re giving them access to a new media: VR and AR, which happens to deliver better performance because the ads are less intrusive and people are engaged with them a lot more. So it’s kind of a win-win-win situation for the users, the developers, but also the advertisers. And that’s really important because if the ads don’t work, advertisers are going to spend less. So you really want the three parties to benefit from it.

Alan: Absolutely. Now, we’ve talked a lot about virtual reality content. What other types of content are you seeing an uptake? Are you seeing this type of thing with augmented reality as well? Or…?

Sam: Yeah. So, I mean, our solution is compatible with all of them, because it’s based on Unity and Unreal and basically on the game engine. But we’re kind of following the users. Advertising is all about numbers, right? You won’t be successful as an advertising company by targeting big-name apps that don’t have that many users. So we found a lot more success in Mobile VR at the moment. That’s where the biggest VR apps actually exist; apps that can be consumed on the Daydream, on the Gear VR, even on the Cardboard. You know, some of them have literally millions of users passing through, and this is where we find a lot of our market feet at the moment. 

We’re targeting also, of course, premium VR. But again, we believe that premium content will always exist. People will always be happy to pay for a triple-A game. That’s not really our target market. We want to target the long tail; the free stuff, which actually represents over 90 percent of the content that people are happy to use. But they want to use it for free. So that’s really what our target market is. 

We have a couple of other interesting use cases; a few AR apps. There’s not that many apps that I used by the consumers day-to-day. It’s a lot of demos, a lot of cool stuff. But you don’t have the same kind of retention, the same kind of community, I would say, in terms of AR that they’re using in VR at the moment. We also start to work with a location-based – it’s actually a really interesting project — where everyone is trying to find additional revenue stream, new way to make money without charging the end user. And that’s where advertising so great, because you don’t actually get to charge your user; someone else is paying for it. And I think that’s why it’s very attractive.

Alan: Absolutely. So at the end of the day, users aren’t they aren’t paying for it, and that’s fantastic. So users get that are content; content developers get better revenue streams, and advertisers get more targeted ads. It sounds like win-win all the way around.

Sam: Yeah. And the last spot is – I cannot insist enough on it — it’s very important that advertisers hate spam as much as you. Because, for them, it’s wasting money if you don’t actually interact with the ad. So the better the ad performs, the less ads there will be overall, because advertisers won’t need to do these kinds of spray-and-pray type things. They would focus on people who are actually interested about their product. So overall, if you want — it’s kind of a paradox — but if you want to reduce the total number of ads, which everyone wants to do — I mean, I hate ads as much as the next guy — you need to create ads that work better for the advertisers. That’s the way to get less ads, because they will only be focused on reaching their core audience and therefore, everyone else won’t be bothered with ads that are irrelevant.

Alan: It’s interesting. You say you don’t like ads. It’s funny that… the Super Bowl, for example. This year, I didn’t really watch the Super Bowl, but I found a website that showed all the commercials that we’re going to air on Super Bowl, and I spent maybe an hour just watching all the commercials that were going to be on the Super Bowl. It’s amazing; the amount of production and talent that goes into these things is absolutely incredible. And it’s no different than the amount of work that goes into making a game or an experience. Being able to add a can of Coke, or a Coke ad… did you see the recent Burger King ad?

Sam: The AR ad blocker, right?

Alan: Yeah!

Sam: Yeah. I thought that was actually awesome because it’s an ad itself. We actually thought about, internally, doing something along those lines, and we were thinking what is going to be the future of ad blockers? Thinking that people would walk with their AR glasses and everything would be blocked around them. It was just a fun idea, but it was really fun to see what Burger King actually did.

Alan: For those of you listening who don’t know, Burger King made an augmented reality app that, if you pointed it at any of their competitor’s posters, billboards, or signage, it would burst into flames and then you could get a free flame-broiled Whopper by submitting that photo of the McDonald’s ad in flames to their Instagram or whatever it was. And I thought it was a really genius way… they’ve got millions of… they’ve given away, I think, something like 50,000 burgers or something. It’s crazy.

Sam: Yeah. For me, this Burger King stunt is actually an ad. Because at the end, when the competitor ad was being burnt, their ad was appearing instead of it. So for me, it really shows the power of ads in immersive media. I think that these kind of stunts that used to work super well in the real world, like experiential marketing, that was limited to only the audience that was on-site. Then after that, it was filmed. Then maybe you would become a viral video somewhere else. But only a really small core of people got to experience this really awesome brand experience. But now with VR/AR, this is actually expansion marketing at scale, because everyone can actually create this experience just by using this device like that; like the Burger King experience. So it really helps propagate these really awesome ideas that brands had, but couldn’t push to a larger audience before. But now, with VR and AR, they get the ability to enable people to actually do this stuff at scale, and interact with the brand in a completely new way.

Alan: It’s pretty amazing. I think one of the other brands that’s done a really, really good job at harnessing AR is Snapchat. Their camera-first platform is really kind of… well, I’ll just put it out there: Snapchat is by far and away, the biggest user of augmented reality in the world. And if you kind of look at it through the lens of what they’re doing, using the cameras and being able to put on Snapchat filters in your face;  if you turn the camera around, you can put things into the space. Really amazing what they’ve done. And, you know, I don’t know if you saw the LeBron James Nike ad they made. They took a poster in a store, and when you open the Snapchat filter and point it at the poster, LeBron James came out of the poster and slam dunked a basketball. Here, real world. Amazing use cases. Does your platform serve for things on Snapchat and Facebook and these other platforms as well?

Sam: These platforms are pretty close platforms, so at the moment at least, if you want to advertise on Facebook, you have to go through their buying platform, and they only care about Facebook. It’s a very closed ecosystem and is the same with Snapchat. At least at the moment; we don’t know if eventually, they would open the gates to other tools, other platforms. So we’re not targeting those. 

What we are predominantly targeting, again, is the indie developer that is making a game, that is making an app, and that is looking for ways to monetize. Our target is really not about pushing cool types of ads to big platforms, but it’s really helping small developers to actually generate revenue. So it’s kind of the opposite idea, where we really prioritize the small developers that just want to make a living out of their awesome content.

Alan: Well, I think there is definitely a need for that. One of the things that I saw about a year ago; Unity was starting to look into this programmatic ad model. Do you see that as a competitive thing?

Sam: Well, eventually. Probably, there will be a lot of big companies — Google, Facebook — obviously are going to try to monetize this new media. They’ve invested so much into hardware and everything. But I think that we have a few years of lead ahead of them. Just because, I guess, the market might not be mature enough for them. They’re still trying to sell hardware. They don’t want to sell ads in this new space because advertising does have a negative reputation, especially for those guys. So I think, on that way, we have a strong angle that we can play with.

As far as Unity goes, we are very close to them. That’s what’s exciting about these spaces. It’s so early that everyone kind of wants to try working with others as well. So, yeah, at the moment, it’s more of a friendly relationship.

Alan: So you said that we’re early in this technology, and it’s interesting because one of the other interviews that we did was with Steve Grubbs from Victory VR, and they’ve created 240 different education VR experiences, for everything from science to dissecting a frog. It seems like the appetite for this technology is really starting to open up. I would have said a year ago that we weren’t even started. It was the beginning. So, where do you see us in a timeline? If the beginning of this technology was in, let’s say 2015-2016 and mass adoption is, you know, X; where are we now, and where do you think this is going?

Sam: Well, I have really high hopes for the future. I really believe that at a high level, spatial computing is really the next interface, the next computing platform. Until now, all our information — everything we are doing on this screen — is in two dimensions, and the real world is in 3D. That’s a big limitation. 

Spatial computing is going to take us from 2D to 3D. That’s for me, the same as the way that the Internet took us from offline to online. That’s the same level of revolution, in a way. I have complete faith that this is going to happen over the next — I mean, completely happen, for everyone — over the next decade, for sure. This is inevitable as far as I’m concerned; it’s a natural evolution of media. We went from text to pictures to videos. The next step is obviously becoming part of the content itself. There are a lot of signs that point in that direction. 

So to answer your question, I think that we are at the very, very beginning; like, probably less than 1 percent of the potential of VR could be. Which is very exciting, because we already see a lot of activity right now in the space. Just to give you an idea, we were measuring for us… what’s really interesting about the adoption, is how many people develop built content for it. These are the early adopters, and they come before people actually get to consume this content. And we’re seeing an over 400 percent increase in content being created every year. That’s four times more every year. And the number of developers that are getting into the space is just crazy. You can see that everyone loves these experiences, and just need maybe a bit more clarity as to why they need VR; what the value of VR/AR is for them; and also to make sure that the value that they get out of it outweighs the cost. That’s the basic ratio that defines if you want to buy something or not. It’s like the perceived value is higher than its cost. And I think for a lot of people, it’s not right the case yet. But as more and more applications go out there, the hardware becomes cheaper; it’s just a matter of time before this actually kicks on. 

So, yeah, I mean, it’s hard to put a clear timeline on it, but I think over the next few years, we’re going to start to see wearables as well, like AR glasses, and eventually is just going to really take over our existing displays.

Alan: So with that horizon of, let’s say, 10 years for ubiquity. Ubiquitous spatial computing within the next 10 years. So, 2028, let’s say. With that, what advice would you give somebody in any business, whether it be a Fortune 100 company, or your local store? What advice would you give these companies? Because one of the things that stood out to me at the Microsoft Hololens presentation at WMC this year, Mobile World Congress, one of the things that stood out to me was the fact that they mentioned that every company is now a technology company. So if that’s the case, what advice would you give a company looking to learn and get started in virtual and augmented reality, in spatial computing? What advice would you give them right now?

Sam: I think it’s about paying attention to it early. We’ve seen that happen many times; with people not paying attention to the Internet; people not paying attention to mobile; in the ‘70s, ‘80s, people not thinking that there would be a computer on every desk. It’s the same kind of thing we are again approaching one of these revolutions. I think it’s really about starting to think. 

To come back to this idea, the world is going to become 3D. Our information, our knowledge, the way we share data, is going to be overlaid environments. We won’t need that boundary, which is the screen between content and reality. Knowing that, it really can change the way you have to think about how your business could be transformed by this. Whether it’s about finding a better way to train your employees (that is obvious), or different ways — better ways — to communicate by using spatial computing. It’s really trying to think, if we didn’t have screens, how can my workplace be transformed? And that’s a big thing. 

And of course, he won’t be, from one day to another, we won’t use screens anymore. That’s not what I’m saying. You know, we still listen to the radio and we still watch TV. We’ve been saying that these media are dead for years, but they’re not. Screens will still exist, but they won’t be the ultimate way to consume content. Spatial computing will be. And I think, just trying to think about this transition from 2D to 3D is the best way to start imagining, what can you do with this? How would you implement it in your business?

Alan: So with that, what are some of the challenges that you’ve seen businesses struggle with that you can lend some advice?

Sam: We mostly target consumer apps. We do have a couple of B2B clients as well. I think businesses in the space are sometimes building really cool case studies or experiments that don’t really have a proper use case. And again, it comes back to my idea that the problem — one of the limitations of VR right now, and is totally normal because it’s a new industry — is the fact that most people are not clear about the value proposition, and why they would need, it beyond it being a gimmick. I think businesses that are early on the market and starting to build cool stuff, they really need to think, how high is that actually going to help the business? It’s not enough just to build an app because it looks cool if it has no practical use case. People are not going to use it. It’s not going to catch on. 

I think that’s really one of the main problems. I can see a lot of really cool stuff happening, but not much things that actually improve sales, for example. And I know that with MetaVRse, for example, you’re doing all this great virtual commerce. And that’s amazing because you can clearly measure that someone who tried a watch on their wrist instead of seeing a picture of it, they’re more likely to buy it. So that’s a clear use case. That’s a clear KPI to show that actually, AR can drive sales. I think a lot more businesses should take that as an example, and start to see how it could actually help them, by actually implementing stuff that works and that moves the needle for them.

Alan: It’s really interesting you say that because we’ve done a lot of different things. We’ve made AR just for the sake of AR; we did a marketing thing for the launch of HBO’s West World; we did a number of things like that. But really, when it comes down to it, what kind of drives us is looking for those use cases that drive the needle in a defined way that solves a problem. 

For example, one of our products that we’re bringing to market is called Floorcast, and it allows people to previsualize what their new floors are going to look like. I’m going through this right now; my basement floor is being done, and they brought carpet samples that were literally 4×4 inches. “What color do you want?” I’m like, “I have no idea what it’s going to look like in gray in my whole basement.” Like, I just ordered gray carpet without knowing. And we have this app that does it. But I didn’t have time to import gray carpet in there. So, you know, that’s something I would have used just to be able to see, what does this look like in my basement? Or what is the new hardwood going to look like in my floor? 

From a business standpoint, that is not just solving a problem from a consumer standpoint, but from a global distribution standpoint. Flooring companies, they sell through distributors, and then retailers, and then a guy coming over with a sample and measuring; there’s a lot of layers of value being wasted through something that could be done using an app. And AR is a prime example of that. 

Another idea is IKEA’s Place: being able to see what furniture looks like beforehand. I think these are great use cases. You nailed it.

Sam: Yeah, and it’s funny, what you mentioned about the flooring thing, because right now, they give you a sample — which is kind of what I was talking about this experiential marketing — give you a sample for you to experience it. But it’s not scalable. It’s not something you can distribute at scale. And right now with AR, they just give you an app. They don’t even have to come and meet you and give you the sample. You can just do that digitally. And then you can not only try this sample, but I’m sure you’ve tried different colors and different textures and everything. It’s just the most scalable way to do it. And the person at these flooring companies should start thinking, what can I do? How can I solve the problems that I had every day, which is travelling to clients and giving them samples and they’re not quite sure? Well, there’s a pretty obvious use case here. I think every company can find use cases like that related to VR/AR.

Alan: I agree. Speaking of that, what is the best business use case of XR technologies that you’ve seen so far?

Sam: We are mostly focused on other B2C side, and I’ve seen some really interesting social VR use cases, really aimed at the enterprise, mostly around communication. So, running virtual meetings; you can be in this zoom room with other people, but it’s not quite the same as being able to actually share data together. There’s a couple of apps, some spaces. 

One of them, Glu, is another one where you can literally all be in the same room with your avatar. That’s normal, basic — nothing crazy about that. But you can actually pull out tools, and you can share screens, and everyone can see your screen in everyone else’s screen. And if you just think, in the real world, if I share my screen right now over Skype, I won’t see your face, or vice versa, and someone else’s screen would take over mine. Only in a spatial environment can you see all these screens together. And you can move them closer, and you can actually draw, and everyone sees it together. So I think communication, social; that is really going to be exciting, and companies that understood that will be able to build a massive business out of it.

Alan: Yeah. It reminds me of the company Spatial. Right. They basically created virtual avatars in mixed reality space, and allowing you to bring in 3D objects and–

Sam: Virtual post-it notes and all of that. Their interface was looking very good, actually.

Alan: Really beautiful. I love that. This is great. So, I want to say thank you so much for joining me on this podcast. I’m going to ask you one more question and then we’ll wrap up: what problem in the world do you want to see solved using XR Technologies?

Sam: Well… that’s a big, big question to finish. I like it! 

I think it’s obviously education. I mean, how can we use the power of this technology, this immersion, to have kids learn in a better way, and give them access to education that they probably don’t have? I think that would be top of my list. Very, very important.

Then, on maybe a less serious note is, you know, enabling creators creating. I mean, that’s what we’re doing. That’s what we’ve been Admix for; definitely something that I’m very passionate about. I was a game publisher – I ran my own studio before — and I know how hard it is to actually generate revenue from the content. And I think if we can help young people getting started, generate more revenue so that they can reinvest and build better companies and become successful that way, that’s a really interesting and exciting mission to have.

Alan: I love it. It’s amazing. And I thought of a cool tagline for Admix: “Admix — Ads That Work in XR.”

Sam: That’s pretty good. One of our previous taglines — we tested different things — was “Advertising That Doesn’t Suck.” So, it’s kind of along the same lines.

Alan: I love it. So, you know, I really want to say thank to you for joining. One of the stats that kind of stood out of my head is that there’s a 400 percent increase in content being developed every single year. That is a staggering: four times as much content, every year. And this is not going to slow down. This is only going to get bigger and bigger and bigger. We’re in the industry that’s going from 10 billion last year, to 200 billion in the next few years. And over the next five, six years, there’s going to be a trillion dollars in value created in this industry. And I think it’s interesting, you’ve kind of position yourself perfectly for this.

Looking for more insights on XR and the future of business? Subscribe to our podcast on iTunes, Google Play, or Spotify. You can also follow us on Twitter @XRforBusiness and connect with Alan on LinkedIn.

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